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AT&T Expands LTE

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AT&T, Inc. (T - Analyst Report) is expanding its 4G LTE coverage by upgrading 7 mobile data cell sites in Fayetteville, NC. We believe these upgrades will enable the company to gain significant momentum in the 4G market, in which it comes a close second to Verizon Communications Inc. (VZ - Analyst Report), with coverage of nearly 150 million subscribers.

The company boasts the best Internet speeds in the industry, as it is the only U.S. carrier that provides 4G networks through both Long Term Evolution (LTE) and High-Speed Packet Access Plus (HSPA+) technologies. AT&T’s LTE networks serve as the benchmark of mobile technology and the life-blood for operators across the world. The company is on track to deploy 4G Long-Term Evolution (LTE) services as early as possible and achieve the target of connecting 250 million people by 2013-end and 300 million people by 2014-end.

To support its 4G LTE services, the company offers several 4G LTE smartphones and tablets, including HTC One X, Samsung Smart PC, Nokia Lumia 900, LG Optimus G and ASUS Vivo Tablet. Recently, AT&T unveiled plans to roll out smartphones – BlackBerry Z10 and BlackBerry Q10 – with the aim of bringing in more customers under its wings.

Acquisitions have played a major role in shaping AT&T’s growth story. Recently, the company entered into an agreement with Verizon Wireless to acquire spectrum licenses. This includes 39 lower 700 megahertz (MHz) licenses, covering 42 million people in 18 states including major territories such as Chicago, Los Angeles and Miami. AT&T also plans to buy the remaining portion of Alltel’s wireless operations including spectrum licenses, retail stores and network assets from Atlantic Tele-Networks Inc.

Moreover, AT&T aims to enhance its high-speed wireless network in order to generate more profits from the surging demand for mobile Internet services for smartphones, tablets and other devices.

However, risk factors such as a saturated wireless market, persistent losses in access lines, labor union issues and aggressive pricing plans of direct competitors are likely to weigh on the company’s revenues and margins in the near to medium term.

Other Stocks

Other telecom stocks that will likely perform impressively in the coming months are France Telecom and Hawaiian Telcom (HCOM - Snapshot Report). Both the stocks carry a Zacks Rank #2 (Buy).

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